Challenges of the Post-Sanctions Era

Radio Farda - With the approval of the 'Joint Comprehensive Plan of Action', Iran's entry into the post-sanctions era has been confirmed. Noushin Seyed Hosseini asked economist Fereydoun Khavand, residing in Paris, whether we can talk about the beginning of a new chapter in contemporary Iranian economic history. Fereydoun Khavand: July 23, 2015, the day the 'Joint Comprehensive Plan of Action' was announced, could mark the beginning of a new era in Iran's economic policymaking, provided two conditions are met: The first condition is that the country learns from the very bitter experience of the sanctions period, becomes familiar with the rules of the game in the international arena, recognizes its own strengths and weaknesses, and can leverage its connections with other players, especially those who hold significant power, to benefit the interests of Iranians. The second condition is that the internal economic environment of Iran must change to utilize the opportunities that the end of sanctions provides, particularly through implementing necessary reforms to move away from a state-controlled and oil-dependent economy and to open the way for all Iranians to participate in the economic reconstruction of their country. Without fulfilling these two conditions, Iran's economy will, at best, revert to the pre-recent sanctions era, along with all the anomalies and deadlocks that existed in the country's economic environment at that time. But in the short term, what challenges does Iran's economy face until the necessary conditions for properly utilizing the post-sanctions era are met? The most significant danger in the short term is excessive optimism regarding the results of the comprehensive agreement reached in Vienna. Although this is a very important document that paves the way for Iran's exit from the most severe sanctions imposed on a country since World War II, one should not expect miracles. Excessive optimism can lead to excessive despair and pessimism, opening the field for extremists opposed to this agreement. Another danger is that with the increase in foreign currency revenues, the intoxication from oil dollars may once again overshadow the necessity of economic reforms, leading to a resurgence of mass imports and a larger government. There is also a serious risk that the sanction brokers, who benefited from the closure of Iran's economic connections with the world, may become post-sanctions brokers or form a new mafia to seize the oil dollars that will flow into the treasury of the Islamic Republic after the sanctions are lifted. What should be done to confront these challenges? The only possible way is to give space to real investors and entrepreneurs, those who pay taxes, create job opportunities, and aim to conquer global markets by utilizing the end of sanctions.